Bank of England sits tight and holds interest rates at 0.5%

17th March 2016


Bank of England policymakers have once again decided to sit tight and hold interest rates at 0.5%.

This month’s Monetary Policy Committee (MPC) meeting marked the seventh anniversary of the base rate being at its historic low. The decision to hold the cost of borrowing at its present level was unanimous.

Given the uncertain global economic backdrop, it looks very possible an eighth anniversary could happen next year, according to commentators.

Howard Archer, chief UK and European economist at IHS Global Insight said that anything else than a 9-0 MPC vote to keep interest rates at 0.5% would have been “a major surprise”.

He noted MPC member Ian McCafferty had dropped his call for a 25 basis point interest rate hike to 0.75% at the February meeting, and no other MPC member currently looks close to voting for an interest rate hike.

Archer said: “We do not see the Bank of England will raise interest rates from 0.50% to 0.75% until May 2017.”

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